Councils will be able to borrow at cheaper rates to cover the cost of the Government’s housing revenue account (HRA) reforms, Treasury chief secretary, Danny Alexander, has announced.
Speaking to the Liberal Democrat Party conference in Birmingham this week, Mr Alexander revealed local authorities leaving the HRA subsidy system would be able to borrow up to £13bn at preferential rates from the Public Works Loan Board.
Officials estimate the move could help council invest an extra £100m annually in housing.
Under ongoing HRA reforms, councils will no longer pay their council house rents into a national pool, later distributed across authorities. They will instead be able to retain income raised locally, but in return, have been forced to take on their share of existing housing debt covered by the Treasury.
Under Mr Alexander’s plan, authority’s would be able to borrow advantageously to fund that debt.
